A chemical threat to Michigan’s drinking water that regulators were unaware of and don’t know what to do about. Sound familiar? Thinking Flint and lead in the water? Well, you’d be wrong and it’s not just a Michigan problem.

The chemicals are per- and polyfluoroalkyl substances (PFAS), and they are now a national health concern as they are beginning to show up in all sorts of places including dumps, groundwater, lakes, and drinking water. Michigan has been called “ground zero,” but it is by no means alone.

PFAS chemicals have been used to make cookware, clothes, shoes, furniture, and even food packaging! They are also used in fire-fighting foams. PFAS includes a family of chemicals but currently the focus has been on two of the PFAS chemicals, as we learn more, those concerns may expand. Unlike many other chemicals, there has been little study on the safety of these chemicals. What is known is that, like PCBs, PFAS chemicals are stable (they don’t degrade), they bio accumulate (the higher up the food chain you are, the more you likely have) and they pose remediation challenges because of their stability. Unlike PCBs, they are water soluble which makes them much harder to control. As a result, they are widely found in the environment and are already present in the blood of virtually everyone in the developed world.

Some studies indicate that PFAS chemicals may:

affect growth, learning, and behavior of infants and older children

lower a woman’s chance of getting pregnant

interfere with the body’s natural hormones

increase cholesterol levels

affect the immune system

increase the risk of certain types of cancer

They are a human health and environmental concern but there is little consensus on what levels of these chemicals are safe in your system.

According to the Michigan Department of Environmental Quality (MDEQ), there are more than a dozen communities where PFAS has been detected. Some Michigan communities have been discovered to be using PFAS-impacted groundwater for their drinking-water supply.

In November 2017, Governor Snyder issued executive order (EO) No 2017-4 creating a multi-agency “Michigan PFAS Action Response Team” to, among other things, “make inquiries, conduct studies, consult with federal agencies, and receive public comments.” The State reportedly will test 1380 water systems and 460 schools for PFAS.

In December 2017, the legislature passed PA 201 which, inter alia, included $23.2 million for state PFAS remediation. It passed 109 to 1 in the House and 33-4 in the Senate but that may be a drop in the bucket as more sites are discovered. This spring, MDEQ asked regulated wastewater treatment plants (WWTP) to conduct a screening of their industrial users to identify PFAS sources including landfills that treat their leachate through the WWTP; develop and implement a monitoring plan to evaluate the possible sources; reduce or eliminate PFAS sources; evaluate impacts and submit reports.

The EPA set a lifetime health advisory (LHA) level for two PFAS in drinking water, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS). The LHA level is 70 parts per trillion (ppt, equal to 70 ng/L) for PFOA and PFOS combined, or individually if only one is present. The EPA has not set health advisory levels for other PFAS chemicals. The State of Michigan is using 70 ppt for decision making purposes.

In the absence of federally-enforceable limits, some states are developing their own guidance and enforcement limits. The limits set by the states range from 400 times higher to 5 times less than the current EPA advisory levels.

Litigation over this contaminant has already begun in New York, Minnesota, Michigan and many other states.

For a State that dealt with PBB contamination in the 1970’s, a whole host of contamination issues from the 1970’s until now and then the Flint lead crisis, Michigan seems to have learned its lesson and is jumping on the PFAS problem with both feet but the ubiquity and complexity of PFAS appears to make this the biggest, most difficult and most expensive environmental issue Michigan may have ever faced.

Back in the 1990’s, there was uncertainty about when a cleanup was truly completed – “how clean is clean?” was the question and it seems that those days may be returning – at least for a while.

The MDEQ announced Tuesday that it was rescinding major parts of its May 2013 Vapor Intrusion Guidance which we blogged about when it was published. This 2013 guidance addressed part of the question of how clean is “clean enough” when a brownfield redevelopment or cleanup does not reduce the residual contamination to zero. Vapor intrusion is explained in this link but, basically, it is the threat that some contaminants may migrate upward from soils and groundwater into buildings at unsafe levels. For the last four years, people in Michigan have relied on and been guided by the 2013 Guidance.

MDEQ has been trying for years to update its clean up rules and standards which have been in place for some 15 years. The thought was that new data and studies were available and the cleanup standards which were largely driven by conservative assumptions should be brought up to date. Due to somewhat arcane legal reasons, MDEQ set October 27, 2017, as its date for promulgating these new rules and have been working hard (and continues to work hard) to meet this deadline (the most current version available at the moment can be found here but updates are expected soon).

Review your BEA or due care plan (if you have one); if your site doesn’t have volatile compounds – rest easier. If it does, your BEA might be subject to an EPA evaluation if there is a concern about vapors migrating into occupied spaces – even off-site spaces.

Until MDEQ adopts its new rules, MDEQ will include a standard caveat in approval letters issued moving forward that screening levels used “may not reflect the best available science.” That level of uncertainty may chill many deals and plans under consideration or drive them to more expensive cleanups.

Logically, MDEQ argues that they should similarly update the vapor intrusion standards and include them in the rules package. Vapor intrusion has been in the press a lot recently including this article that discusses 4,000 sites which the State might be looking to address an issue which was thought put to bed or wasn’t simply an issue when the site was granted closed status.

This is where the uncertainty kicks in. MDEQ doesn’t typically address direct human health threats – that would be the State Health Department. The same State Health Department that allegedly missed the Flint Water Crisis and whose director and chief medical officer have been indicted. The State Health Department takes a fairly conservative approach to vapor intrusion and has told MDEQ that its standards are too lenient. MDEQ has developed new hyper-conservative standards that could cause sites which previously passed to now fail.

What is a property owner/developer to do? First, review your BEA and due care plan (if you have one); if your site doesn’t have volatile compounds – rest easier. If it does, it is possible your property might be subject to EPA action if there is a concern about vapors migrating into occupied spaces – particularly off-site spaces. The owner of the site profiled in the MiLive article above found their BEA protection weaker than they had thought and are now dealing with an EPA demand for payment.

For future deals, buyers and lenders may want more aggressive due diligence and cleanup programs to ensure that vapor intrusion is not a risk. This may sideline properties which, until recently would’ve been accepted using the MDEQ’s 2013 Guidance.

Until MDEQ adopts its new rules (which may not take effect until next Spring), the MDEQ will be reviewing and approving requests to approve “no further action” based on current standards but MDEQ will include a standard caveat in approval letters issued moving forward that screening levels used “may not reflect the best available science.” That level of uncertainty may chill many deals and plans under consideration or drive them to more expensive cleanups or site-specific cleanups which require far more and expensive justification.

In prior years, we knew that regulatory and environmental change was coming but we expected it to be slow and incremental. With an unknown quantity like President Elect Trump, one thing is clear – no one really knows what may happen. Here are a few possibilities:

1. Coal/Cleaner Energy Generation – revitalizing the coal industry was part of Mr. Trump’s midwest stump speeches. Will Mr. Trump be able to reverse Barack Obama’s Clean Power Plan? What about the Paris Climate Accord? Certainly, his team is looking at both of those right now. The dispute in Michigan v. EPA, decided in June 2015, continues to rage. In 2015, the US Supreme Court ruled that the EPA didn’t properly justify its rule governing mercury and toxic pollution (MATS) from power plants because it did not specifically address costs at the initial stage of the rulemaking process. In April, the EPA announced it was standing by its MATS rule and concluded that the benefits far outweighed the costs. Petitioners continue to litigate whether the EPA properly evaluated costs. Here in Michigan, new legislation has been passed (and is awaiting the Governor’s signature) intended to encourage additional investment in energy generation and transmission while balancing consumer choice and a greater percentage of renewable energy generation. Will it work? At a reasonable cost?

2. Power Generation Subsidies/Oil/Gas Generation – Mr. Trump’s attacks on “crony capitalism” would seem to mean that he will stop financial incentives for solar and wind generation. Will he also attack oil and natural gas supports in the tax code? Will he open up ANWAR to oil/gas exploration? Will he scale back attempts to regulate fracking? This will be difficult in light of the December EPA Report which concluded that fracking posed problems such as: fracking water withdrawals compete with other water needs; spills of hydraulic fracturing fluids and chemicals or produced water may impair groundwater resources; injection of hydraulic fracturing fluids into wells may allow gases or liquids to move to groundwater resources; discharge of inadequately treated hydraulic fracturing wastewater to surface water resources; and contamination of groundwater due to disposal or storage of fracturing wastewater.

3. Pipelines – will Mr. Trump reverse the Obama administration’s dim view of oil and gas pipelines such as the Keystone XL and Dakota Access Pipelines? How will this affect Michigan where public awareness of two 60+ year-old pipelines under the Mackinac Straits has galvanized both sides of the political spectrum into action. In 2014, Michigan convened a pipeline task force which issued a report in 2015. In September, 2015, the State entered into a written agreement with Enbridge to prevent the transport of heavy crude oil through the Straits Pipelines. The task force also recommended that the pipelines be independently evaluated and that additional financial assurance be provided. The State solicited Requests for Information and Proposals (RFPs) and Enbridge agreed to pay $3.6 Million for the evaluation of the Straits Pipelines. An independent evaluation of alternatives to the Line 5 pipelines is also underway. When those will be completed is not known.

4. Infrastructure – Mr. Trump campaigned on infrastructure (although to hear him tell it, that only encompasses airport quality), and Governor Snyder appointed a 21st Century Infrastructure Task Force which concluded that the State needed to be investing $4 Billion more than it was in infrastructure to address roads, bridges, internet, water, sewer and other infrastructure needs. Given the recent nationally publicized Flint Water debacle, will Michigan find the intestinal fortitude to fully invest in infrastructure or will we continue to patch and delay? Given the State’s recent fight against a federal judge’s order to deliver clean water, and Michigan legislators “default anti-tax setting,” the future does not bode well.

6. Other issues – there are a number of other issues on the horizon including cleanup standards, the maturing of the Great Lakes Water Authority and its ability to deliver clean water and septic services at a reasonable price, Michigan’s effort to reimagine its solid waste program, water withdrawals and protection of the Great Lakes from invasive species and nutrients leading to algal blooms.

As you may recall from this spring, I was asked to serve on MDEQ’s initiative to review and improve the “patchwork quilt” of statutes and rules regarding brownfield redevelopment incentives, grants and loans. A CSI II group (of which, in full disclosure, I chaired the Legislative Committee) met regularly over the Spring and Summer and MDEQ has announced two meetings (see the attached flyer) to roll out the proposed changes. These changes have not yet been introduced in the Legislature and thus, are currently only an MDEQ internal recommendation. The hope is that these changes will be introduced shortly.

if passed, these proposed changes should streamline, simplify and speed up the process for loan, grant and TIF approvals to enable projects to get started faster than ever before while supporting a greater range of eligible activities than previously available.

There was some tension between those championing redevelopment and those focusing on environmental remediation but ultimately, there was agreement on a set of changes and clarification of the rules and statutes to clarify the process for obtaining loans, grants and tax increment financing for brownfield redevelopment. The five most significant changes include: (more…)

When a seller or lender gives a prospective buyer a phase I environmental site assessment (ESA) and it concludes there are no recognized environmental concerns, that means you’re “good to go,” right? Well, not so fast. There are some things to check on which include:

1. When was the ESA performed and to what standard? Standards have changed over the years and if the ESA is 6 months old or older, parts of it will need to be updated. Sometimes ESAs done for lenders don’t include all the elements a buyer must include to satisfy the All Appropriate Inquiry standard. It is also possible for much older ESAs, that circumstances may have changed and you’re better served just starting over.

2. For whom was the ESA prepared and can you rely on it? Most ESAs were prepared for a specific client and often include a limit on who can “use” them. There’s no certainty on whether a use limit actually prevents you from relying on an ESA to assert the innocent landowner defense but it is likely that such a limit would prevent you from seeking recourse from the consultant that prepared it, if it turns out to be inadequate.

3. Even if you can rely on it, will the consultant stand behind it? Often, consultants will “let” you rely on their old ESAs for a fee. The question to ask is – is it worth it? I have seen consultants attempt to contractually limit their exposure to $50,000 or their available insurance or their fee whichever is less! I have also seen consultants say that they will only be liable for direct losses and will not be liable for so-called consequential losses such as lost value or revenue. This means that the consultant will only be liable for the actual harm (breaking things or hurting people) they cause and not for any errors or oversights they make in actually doing their work!

In short, there are many pitfalls to relying on a so-called “clean” prior phase I and the list above only scratches the surface. We still live in a caveat emptor world and you, as buyer, need to take steps to beware.

As regular readers of this blog know, initially, I was not a huge fan of MDEQ’s 2012 CSI (Collaborative Stakeholder Initiative) process aimed at refining MDEQ’s Part 201 language and rules to enable more sites to achieve closure and get out of “contamination limbo.” Well, the process did lead to some specific recommendations and some concrete legislative changes and it appears that closures are slowly being approved more quickly and easily.
Well, not one to rest on her laurels, Anne Couture at the MDEQ decided to try and revisit the process in 2014, this time focusing on making the “patchwork quilt” of statutes and rules regarding brownfield redevelopment, incentives, grants and loans more straightforward. A CSI II group (of which, in full disclosure, I am a part) has had its first meeting and will be working throughout the Spring and Summer. The group has been charged with focusing on the following six specific areas:

If you have specific concerns regarding these issues or ideas on ways to improve or streamline the brownfield process or incentives, feel free to let the MDEQ know or send me an email at asiegal@jaffelaw.com and I will be sure to pass your comments on.

As this new year kicks off, we thought we’d look ahead at what we think may be the big stories of 2014 at MichiganGreenLaw.com, in no particular order:

•Wetlands – Will EPA and the Army Corps of Engineers finalize guidance regarding the scope of waters regulated under the Clean Water Act? Or will there be new rules or even new legislation? There are members of Congress on both sides of this issue and it is unclear which way this issue will go, although the federal trend is to try and govern as many bodies of water no matter what. This fall, EPA published a draft connectivity analysis which many view as a prelude to new regulations attempting to vest the federal government with broad jurisdictional over virtually every drop of water in the country. It will be interesting if the federal government tries to delete the “significant” portion of the Rapanos “significant nexus” test.

• Hydraulic Fracturing – this continues to be a lightning rod for controversy. At the end of 2013, the Associated Press reported on both alleged and confirmed environmental problems in 4 states including Ohio and Pennsylvania. Michigan looks to beef up its oversight of, and its communications regarding, fracking proposals and operations. The University of Michigan continues to study the technical issues. The focus on this issue seems to be shifting toward the volumes of water used in fracturing and monitoring withdrawals used for oil and gas production. It appears that the 2012 U.S. Department of the Interior draft rules for fracking on federal and Indian lands remain draft – will they ever be finalized?

• MDEQ Brownfield Process Streamlining. MDEQ has promised to convene a short-term task force to work on harmonizing, improving and streamlining the various funding mechanisms currently used to incentivize brownfield redevelopment. This can only be a plus.

• MDEQ Cleanup Rules – as required by the Legislature, MDEQ proposed adopting its previously informal standards as formal cleanup rules late in 2013. The MDEQ will continue to work on improving and in some cases broadening its cleanup rules and criteria – we expect more work on the assumptions of exposure underpinning the standards, more work on vapor intrusion standards and more work on standards and processes applicable to groundwater venting into surface waters. MDEQ also continues to discuss more rules and standards defining what constitutes “due care” which is an issue for property owners who are not liable pursuant to a BEA and for other reasons.

• Keystone Pipeline. As we predicted, President Obama and Congress continue to be locked in a politically charged dispute over the Keystone XL pipeline, a proposed 1,700-mile oil pipeline from Canada to Texas. The President deferred it and lately the pundits have argued that pipelines are safer than transporting shale oil by truck and train.

• Energy Policy In Michigan – at the end of the year, and after a year of “listening” sessions and collecting information, Governor Snyder indicated that he intends to seek legislation improving Michigan’s energy policies, focusing on lowering costs, improving reliability and minimizing environmental impacts. This will be interesting.